Alberta to Single Create Energy Regulator

Oil and gas industry will face fewer hurdles

Alberta’s plan to have a single regulator for energy development will help the province compete more effectively with other jurisdictions, according to former PwC partner Scott Bolton.

“If you look at it from a competitive standpoint, other provinces or states have more streamlined systems in place and it was putting Alberta in a competitive disadvantage,” he says.

It’s no longer the case where Alberta has all the oil and gas in North America and therefore has a captive market. Shale gas production has picked up in Eastern Canada and the United States in the last few years, forcing the province to compete for capital.

The plan to create a single regulator was recommended by the Regulatory Enhancement Task Force, which delivered its report to the province in early 2011.

The task force recommends that the regulator build upon the existing foundation of the Energy Resources Conservation Board and take on unified responsibility functions required to issue upstream oil or gas project approvals, such as the disposition of public lands and reviewing environmental impact assessments.

Currently, if a company wants to develop an energy project in Alberta, it must go through Alberta Energy, Alberta Environment, Alberta Sustainable Resource Development, and the ERCB.

“There are gray areas in between of who’s responsible for what and this has resulted in overlap and time delays,” Bolton explains. “And that’s really the root of the issue. So the intention is to streamline the policy development into one government department.”

Having a single regulator instead of four is not intended to make the rules any less onerous, he says. What really matters is that time of execution should decrease and that’s what the benefit will be to the industry.

However, a single oil and gas regulator won’t be in place for a while. First, the government needs to introduce and pass the legislation, which is expected sometime in the spring. Then it will take some time to set up and take over the responsibility of the other regulators.

“With more than one regulator, you have different risk assessments, overlap and with one regulator you can streamline the process and make it more efficient,” Bolton explains. “It just brings a more focused, disciplined, consistent approach to regulation. Streamlined and efficient regulation is a competitive aspect attracting investment capital.”